Industrial Union of Donbass to Buy Iron Ore from Brazil
5 February 2008
According to Serhiy Taruta, the Chairman of the Board of the Industrial Union of Donbass (IUD), said that IUD intends to sign a long-term 3-5 year contract to purchase 4 mln mt of iron-ore per year from the Brazilian company CVRD. According to IUD officials, domestic price of USD 50/mt far for the iron ore concentrate shipped from Ingulets Iron Ore is unjustifiably high. IUD controls Alchevsk Iron & Steel and DMK Dzerzhynskogo Steel in Ukraine. Andriy Gostik: In late 2006, high domestic ore prices engendered a corporate conflict between IUD’s largest steel mill, Alchevsk Iron & Steel, and SMART Group who controls shipments of ore from Ingulets Iron Ore to IUD. We think that the contract with CVRD will ensure a greater stability of iron ore supplies to IUD’s steel mills. We estimate that shipments of 4 mln mt of iron ore from CVRD would meet ~75% of Alchevsk Iron & Steel’s needs.
